Femi Oye, the Chief Executive of SMEFUNDS, has called on the Federal Government to back initiatives aimed at establishing a regulated global carbon market, which is estimated to be valued at $1 trillion annually.
Oye highlighted that receiving support would boost the country’s efforts to address climate change on a global level.
He explained that carbon markets are pivotal in international attempts to tackle climate change, as they offer financial incentives to reduce greenhouse gas emissions.
These markets allow organizations to trade emission credits, encouraging industries and nations to lower their carbon footprint.
According to him, projects that generate carbon credits are already having an impact, as separate shared value assessments have shown that Gold Standard-certified projects have resulted in $16 billion worth of additional benefits, including the promotion of biodiversity, employment, livelihoods, and health outcomes.
With governments in Ecuador, Kenya, Indonesia, Tanzania, Zambia, and Zimbabwe implementing new regulations to maximize the benefits of the carbon market, he urged the Federal Government to also take similar steps to attract projects that address local priorities and guarantee long-term advantage.
Oye said: ‘’For the record, last year, the World Bank announced ambitious plans for the growth of high-integrity global carbon markets, with 15 countries set to earn income from the sale of carbon credits generated from preserving their forests.
‘’By next year, these countries will have produced over 24 million credits and as many as 126 million by 2028. These credits could earn up to $2.5 billion in the right market conditions, with much of that going back to communities and countries. Thriving carbon markets have the potential to do the same for other countries in the long term.
‘’The 15 countries—Chile, Costa Rica, Cote d’Ivoire, Democratic Republic of Congo, Dominican Republic, Fiji, Ghana, Guatemala, Indonesia, Lao PDR, Madagascar, Mozambique, Nepal, Republic of Congo, and Viet Nam—are part of the World Bank’s Forest Carbon Partnership Facility (FCPF), which has supported pilot programs since 2018 to establish efficient systems for carbon-crediting initiatives.
‘’Supporting five countries in 2024, the World Bank will work with governments and local communities to access carbon markets. By 2028, it is expected all 15 FCPF countries will be in a position to interact with carbon markets.
‘’Each carbon credit is monitored, reported, and verified by a third party against the World Bank-managed FCPF Standard and World Bank Environmental and Social Standards. The 15 programs use cutting-edge technology to ensure that carbon credits are accurately measured and accounted for. The programs cover entire jurisdictions, meaning that the reforestation and conservation efforts are not undermined by deforestation elsewhere.
‘’The bank supports countries in deciding how to use their carbon credits—either monetizing them through carbon markets, using them for their own Nationally Determined Contributions, or other transactions to raise additional finance.’’
The Forest Carbon Partnership Facility (FCPF) is a global partnership of governments, businesses, civil society, and Indigenous Peoples’ organizations focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests, and the enhancement of forest carbon stocks in developing countries, activities commonly referred to as REDD+. Launched in 2008, the FCPF has worked with 47 developing countries across Africa, Asia, and Latin America, and the Caribbean, along with 17 donors that have made contributions and commitments totaling $1.3 billion.
